While waiting for the inauguration, perhaps it is the right time to evaluate some of the challenges that we will face in the near future, because the winds that are rising are not particularly favorable.
First, changes in the ECB. The decisions adopted last year are beginning to be felt, and we will notice them more from now on: European solidarity, channeled through the back door of the ECB, is coming to an end. See if not. Long-term credit to Spanish banks, at zero or negative interest rates, has gone from around 300,000 million in November to 90,000 million, and continues to fall. The same trend can be seen in the extraordinary support for public finances: debt purchases (basically public) have ended, and the accumulated stock of Spain's (622,000 million euros, out of a total of 1.5 trillion) has begun to decline. reduce. And, finally, a rise in rates: from -0.5% in October 2019 to 3.75% today and expectations of 4% (in the deposit facility rates; the rate of the main financing operations is already in 4.25%). Companies, families and the public sector have been feeling its effects on the availability of credit and its cost for months now: one-year Treasury bills have gone from negatively yielding to the current 3.644%, and 10-year public debt, from 0.4 % of December 2021 at 3.605%.
Second, modifications in Brussels. On January 1, the Stability Pact returns and we will return to the files for excessive deficit and debt and, with it, the pressure to cut spending or increase income. In addition, the credits already used (to finance the ERTE in 2020, or those that have to be requested for the second tranche of 70,000 million of the Next Generation) must begin to be returned.
Third, resistant inflation. Not only because of its negative effects on interest rates, but also because of the reduction in the real income of households and companies. With the savings resources generated in the covid exhausted, and the strong expansion of employment, private consumption and investment will suffer.
Fourth, global growth problems. Rising interest rates, a slowdown in China, increases in oil prices, recession or near-recession in Germany, and modest expectations of GDP growth for the euro area (the ECB is betting on 1.5% and 1.6% for the 2024 and 2025, respectively) define a clearly bearish framework.
Fifth, exhaustion of the factors of the 2021-23 recovery. Tourism has reached heights that are difficult to overcome, as have exports of goods and employment. This points to moderate increases in GDP (the Bank of Spain expects 2.2% for 2024 and 2.1% for 2025, and the consensus of the Funcas pension institutes, 1.8% for 2024 ).
Downward international context, restrictive monetary policy, excessive inflation and a return to a certain austerity. Less progress in GDP and employment awaits us. These are the wickers of the basket that the next president will collect. Good luck.
